FOI 11205

Car Parking Spaces - South Street, Brentwood

Request

Under the Freedom of information Act I require you to provide me with the answers to points 1-6 above.

Points 1 and 2 – Noted

Point 3 – VAT

I set out the response to the issue which we have received yesterday from KMPG. I suggest that you seek some VAT advice on car parking spaces as you are incorrect in stating that VAT cannot be charged on the subject car spaces. The material difference between our valuations relates to this issue. As the advice from KMPG states, car spaces are an exception to the rule and VAT should be charged on the subject car spaces and your comments regarding the fact that the land is not elected for VAT is not relevant in this case. I therefore look forward to your acceptance of this point by return so we can narrow down where we are differing and reach an amicable agreement without incurring the unnecessary costs of taking the matter to court:

Whilst supplies of land are usually exempt from VAT under Group 1 to Schedule 9 of the VAT Act 1994, there are some exceptions to this rule (listed in Item 1 to that Note). In particular Item 1 (h) provides that the grant of facilities for parking a vehicle is not exempt and so would be, prima facie, taxable at the standard rate of VAT.

The supply which you have described below appears to be of this nature and this is supported by the lease which is purely one of the land on which the parking spaces are situated. We would therefore expect the Council to charge VAT on this supply.

I trust this is helpful. Please do not hesitate to contact John or I should you have any further queries.

Business Rates

I note you comments regarding deductions for business rates on the Coptfold Road Car Park and look forward to receiving details of the level of business rates that your client pays on the 4 car spaces so we can compare the details.

We are not valuing car spaces that are ancillary to offices but stand alone car spaces which are two different things and have 2 different values. We are valuing a lease for four car spaces which is a separate lease and not car spaces that are ancillary to another business tenancy. The level of rent should reflect this.

Size of Car Spaces

We haven’t yet discussed the fact that the size of the car spaces at the Coptfold Road multi-storey was determined when it was built in 1972 (when cars were generally smaller than today) and these are therefore much smaller spaces than the subject car spaces. We should therefore be reflecting this additional amenity in our agreed valuation.

Response

Thank you for your FOI request as set out below:

The answers to your questions are as follows:

Points 1 and 2 – Noted

Point 3 – VAT

I set out the response to the issue which we have received yesterday from KMPG. I suggest that you seek some VAT advice on car parking spaces as you are incorrect in stating that VAT cannot be charged on the subject car spaces. The material difference between our valuations relates to this issue. As the advice from KMPG states, car spaces are an exception to the rule and VAT should be charged on the subject car spaces and your comments regarding the fact that the land is not elected for VAT is not relevant in this case. I therefore look forward to your acceptance of this point by return so we can narrow down where we are differing and reach an amicable agreement without incurring the unnecessary costs of taking the matter to court:

Whilst supplies of land are usually exempt from VAT under Group 1 to Schedule 9 of the VAT Act 1994, there are some exceptions to this rule (listed in Item 1 to that Note). In particular Item 1 (h) provides that the grant of facilities for parking a vehicle is not exempt and so would be, prima facie, taxable at the standard rate of VAT.

The supply which you have described below appears to be of this nature and this is supported by the lease which is purely one of the land on which the parking spaces are situated. We would therefore expect the Council to charge VAT on this supply.

I note you comments regarding deductions for business rates on the Coptfold Road Car Park and look forward to receiving details of the level of business rates that your client pays on the 4 car spaces so we can compare the details.

We are not valuing car spaces that are ancillary to offices but stand alone car spaces which are two different things and have 2 different values. We are valuing a lease for four car spaces which is a separate lease and not car spaces that are ancillary to another business tenancy. The level of rent should reflect this.

Size of Car Spaces

We haven’t yet discussed the fact that the size of the car spaces at the Coptfold Road multi-storey was determined when it was built in 1972 (when cars were generally smaller than today) and these are therefore much smaller spaces than the subject car spaces. We should therefore be reflecting this additional amenity in our agreed valuation.

I attach the minutes of the committee on 11 July which set the parking rates on the car parks referred to.